Energy Crops, Food Security, and Rural Development: The Role of Oilseed Production Around Brazil

Biodiesel in Brazil is relatively new in comparison to ethanol and is currently used in a five percent blend (B5) nationwide. The biodiesel program is based on three “fundamental pillars”: social inclusion, environmental sustainability, and economic viability. The majority of the nation’s biodiesel is derived from soy, which raises problems for both social inclusion and environmental sustainability. Soy has been implicated in destruction of Amazon and Cerrado biomes. However, as the world’s second largest soybean producer, Brazil’s soy complex serves multiple domestic and international markets. The tremendous expansion of soy largely predated the introduction of biodiesel. The cultivated area grew much more rapidly in the five years prior to the policy than in the five years after its implementation, possibly driven more by demand for soymeal than for oil used to make biodiesel. Thus, attribution of environmental impacts is unclear. Further, while the policy of social inclusion requires that a portion of feedstock be sourced from small farmers, the industry’s dependence on soy makes this questionable. Soy tends to be planted in large, heavily mechanized, monoculture plantations, not amenable to smallholder inclusion. Efforts to introduce alternative crops deemed more environmentally or socially sustainable like Jatropha curcas, castor, oil palm and some native palms have not gained much momentum and they have seen little utilization as biodiesel feedstocks. This paper and the associated presentation examine the implications of dependence on soy for the sustainability of Brazil’s biodiesel industry and discuss the prospects for larger volumes of alternative feedstocks to be introduced.